Exit Monsignor Cinquecento

The Economist
June 29, 2013

http://www.economist.com/blogs/charlemagne/2013/06/vaticans-woes


HE WAS known in his home town as “Monsignor Cinquecento”—not an allusion to the super-economic Fiats Roman Catholic priests drive in Italian television dramas, but to the €500 notes that Monsignor Nunzio Scarano (pictured) is said to have had in abundance.

Monsignor Scarano was one of three people arrested by Italian police on June 28^th in an affair that has turned an unsettling spotlight on the Holy See’s financial institutions just days after Pope Francis began a clean-up of the Vatican’s scandal-plagued “bank”, the Institute for the Works of Religion (IOR).

Monsignor Scarano, who denies all wrongdoing, is certainly no barefoot priest. A banker before his ordination, he was appointed to a senior post in the department that manages the Holy See’s assets (from which he has been suspended since being placed under investigation earlier this month on suspicion of money-laundering). According to an Italian press report, Monsignor Scarano owns a 90% stake in a property firm and has a circle of friends that includes one of Italy’s best-known show business personalities.

Few writers of fiction would tax their readers’ credibility with a story like the one outlined in the warrant issued for the arrest of the Monsignor and his two alleged co-conspirators, both of whom also deny wrongdoing. One, Giovanni Maria Zito, is an officer in the Carabinieri police force, who was previously attached to Italy’s domestic intelligence service, the Agenzia Informazioni e Sicurezza Interna (AISI). The other is Giovanni Carenzio, a financial broker, reportedly active in Switzerland and the Canary Islands. According to the financial daily Il Sole-24 Ore, the two men came into contact through a Catholic order of chivalry, the Ordine Constantiniano, that claims to be the oldest in Christendom.

Italian prosecutors allege that they conspired with Monsignor Scarano to get back from Switzerland €20m said to have been exported by a family of Neapolitan ship owners as a way of avoiding tax. Mr Zito is accused of having chartered a pilot and plane to fly to Switzerland, exploiting his privileges as an intelligence official to elude the normal controls. But, said the prosecutors, Mr Carenzio failed to produce the money that had been entrusted to him and after several days waiting Mr Zito gave up and returned to Italy.

Monsignor Scarano was said to have paid Mr Zito €400,000 towards his expenses before cancelling a second cheque for €200,000. Prosecutors view the payments as bribes.

The warrant showed that police who wiretapped the prelate’s telephone conversations heard him refer to two accounts at the IOR—one in his own name and the other marked “Old People’s Fund”. Before his arrest, Monsignor Scarano had been caught up in an investigation that focused on his home town of Salerno where he was said to have offered several local businesspeople cash in €500 notes in return for cheques that were then banked as donations.

But much remains unknown about both cases, and the Vatican official told a local newspaper that the investigation in Salerno was the result of a misunderstanding. “I have not stolen anything,” he was quoted as saying. “I have had the blessing to have crossed paths with well-off people who have always supported me in my charitable works.”

Two days before Monsignor Scarano was jailed, the Vatican announced that Pope Francis had set up a commission of inquiry into the IOR with powers to override its secrecy rules. The members of the commission include three cardinals, a senior Vatican official and the former American ambassador to the Holy See. Though awkward for the Vatican, the latest case will strengthen Pope Francis’s arm as he sets about trying to reform one of the darkest corners of his domain—a source of repeated embarrassment to his predecessors since 1982 when the IOR was caught up in the fraudulent collapse of Banco Ambrosiano. The bank’s chairman, Roberto Calvi, was found hanging dead beneath Blackfriars Bridge in London. Prosecutors in Rome subsequently concluded he was killed by the Sicilian Mafia, but no one has ever been convicted of his murder.